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MPSC Issues Annual Report on Renewable Energy

February 14, 2014 - The Michigan Public Service Commission (MPSC) today issued its fourth annual report on the implementation of the state's renewable energy standard and its cost effectiveness. Public Act 295 of 2008 requires the report to be issued by Feb. 15 each year.

For 2012, the estimated renewable energy percentage reached 5.4 percent, up from 4.4 percent the previous year. For 2013, renewables are expected to have reached 6.9 percent. Michigan's renewable energy generation is projected to reach 10 percent in 2015.

"The year 2012 marked the first time that Michigan utilities were mandated to meet an interim compliance requirement, and all of them succeeded," noted MPSC Chairman John D. Quackenbush. "Progress toward Michigan's 10-percent-by-2015 renewable energy standard is going smoothly, and since the standard has been in effect, over 1,100 megawatts (MW) of new renewable energy projects have become commercially operational."

Highlights of the report include the following:

Through 2013, Michigan's renewable energy standard has resulted in the development of 1,182 MW of new renewable energy projects.

The weighted average cost of all renewable energy technologies is $78.39 per megawatt-hour (MWh), which is less than the coal guidepost rate ($133 per MWh), and Consumer Energy's revised $107 per MWh levelized cost.

The most recent contracts approved by the MPSC for new wind capacity have levelized costs in the $50 to $59 per MWh range, half of the levelized cost of the first few renewable energy contracts approved in 2009 and 2010.

A total incremental cost of $1.6 billion was spent on renewable energy in Michigan from 2009 through 2012

All Michigan electric providers - except Detroit Public Lighting (DPL)-- are on pace to meet interim targets as well as the 10-percent-by-2015 target. The MPSC has suspended all of DPL's renewable energy filings during the city's bankruptcy process.

Wind energy has been the primary source of new renewable energy in Michigan. At the end of 2013, there were over 1,100 MW of utility-scale wind projects in operation in Michigan. Michigan's wind generation is expected to increase to over 1,400 MW by the end of 2014.

DTE Electric's renewable energy surcharge was reduced from $3 per meter per month to 43 cents per meter per month, effective January 2014, and Consumers Energy Company has a case pending at the MPSC that would reduce its renewable energy surcharge to zero.

Statewide, there has been significant investment in the renewable energy sector since the passage of Public Act 295 in 2008. Conservatively, over $2.2 billion has been invested to bring 1,113 MW of new renewable energy projects online through 2013 in Michigan.